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2. Intercompany and Dual currency Presenters: James Sonne
AX UG - BosTON
Intercompany and Dual currency
Presenters:
James Sonne
Title page to include presentation title/topic, speaker, date etc.
January 17, :00 – 2:00 pm

3. Presenter
James Sonne, D365F&O Enterprise Delivery Manager James is a functional senior consultant with extensive experience working on packaged and custom ERP systems in operational, consulting and IT environments. He has over 25 years of controller/vice president of finance experience and worked with a variety of industries throughout his career. He has worked on many Microsoft Dynamics AX implementations over the past ten years both as a sole consultant/manager, and as team senior financial lead. Prior to working with DAX, James has administered custom ERP systems in Windows, AS/400, and Unix/Xenix environments. In addition to mature financial management, his skills include repair of broken implementations, data conversion, software development, software integration, and post-implementation support. He has extensive knowledge of Dynamics AX accounts receivable, accounts payable, general ledger, inventory, trade allowance, and production modules. As well as Dynamics AX implementations, he was involved various levels of Dynamics AX technical trainings. James’s areas of practice have included: acquisitions and dispositions, administration/executive management, bankruptcies and foreclosures, data migrations and database mining, disbursing agent, ERP/financial systems implementation, financial modeling and budgeting, general ledger and financial statements, interim executive management, internal audit, network administration, network design and engineering, process discovery, retirement savings plan trustee, revenue recognition, system training and procedure documentation.
Education: BS, Accounting, Mankato State, MN

4. Agenda
1:00 p.m. – 1:40 p.m. Intercompany Presentation 1:40 p.m. – 1:50 p.m. Dual currency presentation 1:50 p.m. – 2:00 p.m. Question & Answers

5. Objectives Flavors - Intercompany Transaction Types Setup Ledger
Ledger journals with mixed companies
Intercompany Sales and Purchase of Inventory
Setup Ledger
Chart of Accounts
Posting Profiles
Setup Inventory, Customers, Vendors
Intercompany Customers and Vendors
Customer and Vendor Posting Profiles
Drop Ship End Customers (incl. cost price check box)
Process Examples
General Journal
Drop Ship Sales Order to End Customer
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6. Definitions
The term Intercompany (IC) is used to describe transactions between two separate AX / D365FO legal entities. The setup and processing goal facilitates advanced accounting requirements by balancing (mathematically synchronizing) the related transactions. There are two forms of IC in AX / D365 Without Inventory Ledger General Journals (GJ) With Inventory Intercompany Sales / Purchase orders (IC SO PO) (related: IC payments)
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7. GJ – Setup - Overview Chart of Accounts Journal Names Posting Profiles
Create Receivable Payable Revenue and Consumption accounts
Journal Names
Create Intercompany Journal
Posting Profiles
Intercompany Posting Accounts
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8. Which of the following are valid AX intercompany types?
a. IC Sales order / Purchase order
b. IC Transfer order
c. IC Quarantine order
d. All of the above

9. Which of the following are valid AX intercompany types?
a. IC Sales order / Purchase order
b. IC Transfer order
c. IC Quarantine order
d. All of the above

10. Chart of Accounts – Used by transactional and consolidation LE
COA Setup – Plan - 10,000 feet (GJ EX1: Cash $5M, EX2: PPD $10k/mo.) (EX3: IC SO PO $xxx)
Chart of Accounts – Used by transactional and consolidation LE
Create Receivable Payable Revenue and Consumption accounts
Kevin

11. GJ Goal – Post Balanced IC GJ
General ledger > Journals > General journal
Kevin

12. Chart of Accounts one set strategy19*
Ledger Setup – COA plan
Chart of Accounts one set strategy19*
Create Receivable Payable Revenue and Consumption accounts
Kevin

13. Ledger Setup – COA setup
Chart of Accounts
Create new accounts for General Journals
General ledger > Setup > Chart of Accounts > Chart of Accounts > New
Kevin

14. COA – Setup – Assign accounts
Posting Profiles
General ledger > Setup > Posting > Intercompany Accounting
There will be a dance, different setup by company
Kevin

15. COA – Setup – Assign accounts
Posting Profiles
General ledger > Setup > Journals > Journal names
Kevin

16. Process – Post an IC GJ
General ledger > Journals > General journal
Kevin

17. Goal Achieved - Balanced IC GJ Vouchers – $5 M Cash
General ledger > Journals > General journal > Voucher > Transaction origin
Kevin

18. Goal Achieved - Balanced IC GJ Vouchers - $10 K per month Prepaids
General ledger > Journals > General journal > Voucher > Transaction origin
Kevin

19. IC SO Goal - Trial Balance Example
Consolidated Trial Balance before eliminations
Kevin

20. IC SO PO – Setup - Overview
Customer Vendor
Point Customer and Vendor to each other
Posting Profiles
Assign Customer and Vendor posting profiles
Assign Revenue and Consumption posting profiles
Items
Assign to the IC Vendor
Drop Ship End Customers
Set the Cost Price Checkbox
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21. IC SO PO – Scenario: Drop Ship to End Customer
Kevin

22. IC SO PO – Assign Revenue and COGS Accounts
Inventory management > Setup > Posting > Posting
Kevin

23. IC SO PO – Customer Vendor Trading Relationship Setup
Activate IC:
… > General (ribbon) >Intercompany > Trading relationship
Kevin

24. IC SO PO – Customer Vendor Trading Relationship Setup
Similar screen, different path(s) in D365FO
D365FO > Accounts receivable > Customers > All customers > General (tab) > Intercompany
Kevin

25. IC SO SP – Purchase order Policies
Abc

26. IC SO PO – Sales order policies

27. IC SO PO – Customer Vendor Setup Effect
Customers and Vendors in different companies are now entangled.
Kevin

28. IC SO PO Setup – Separate IC AR / AP Agings on Trial Balance
Accounts receivable (payable) > Setup > Customer (Vendor) posting profiles
Kevin

29. IC SO PO Setup – Assign Items to the IC Vendor
Product information management > Released products > [select product] > Product (ribbon) > Purchase (fast tab) > Administration > Vendor
Kevin

30. IC SO PO Setup – Similar setup in D365FO
Kevin

31. IC SO PO Setup – End Customer Setup (Optional)
Product information management > Released products > [select product] > Product (ribbon) > Purchase (fast tab) > Administration > Vendor
Kevin

32. IC SO PO Example – SO to End Customer
Accounts Receivable > Common > Sales orders > All Sales orders > New > Confirmation
Kevin

33. IC SO PO Example – Linked Intercompany Tracing
Kevin

34. IC SO PO – Balanced Trial Balance Goal Achieved
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35. IC SO PO – Vendor Payment
Edit Sales order policies Post Customer journal automatically

36. Dual Currency - Introduction
Functionality that was introduced in Microsoft Dynamics 365 for Finance and Operations version 8.1 (October 2018) enables the reporting currency to be repurposed and used as a second accounting currency. This functionality is referred to as dual currency. The changes for dual currency can't be turned off through a configuration key or parameter. Because the reporting currency is used as a second accounting currency, the way that the reporting currency is calculated in the posting logic has changed.
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37. Dual Currency – Posting Process
The posting logic has been changed for all transactions that generate an accounting entry to general ledger. Here is how the reporting currency was previously calculated:
Transaction currency amount > Accounting currency amount > Reporting currency amount
CAD USD EUR
For example, a transaction is entered in the Canadian dollar (CAD) currency. The CAD amount is translated to the accounting currency, which is the US dollar (USD). The USD amount is then translated to the reporting currency, which is the euro (EUR). Therefore, the exchange rates must exist between CAD and USD, and between USD and EUR.
Here is the new calculation:
Transaction currency amount > Accounting currency amount (Accounting currency #1)
CAD USD
Transaction currency amount > Reporting currency amount (Accounting currency #2)
CAD EUR
Because of this change, exchange rates must now exist between CAD and USD, and between CAD and EUR.

38. Dual Currency Reports and Inquiries
Various reports and inquiries now show both reporting currency amounts and accounting currency amounts. Not every report and inquiry has been updated. For example, reports that show amounts only in the transaction currency haven't changed.
The changes follow one of two patterns:
If the report or inquiry had enough space to show amounts in both the accounting currency and the reporting currency, the reporting currency amounts were added.
If the report or inquiry didn't have enough space to show amounts in both currencies, an option was added so that users can select which currency is shown.
For various reports and inquiries, logic was also added to suppress the reporting currency amounts if the reporting currency is the same as the accounting currency, or if the reporting currency wasn't defined on the ledger for the legal entity.

39. Dual Currency – Module Changes
The following modules use the reporting currency as a second accounting currency:
General ledger
Financial reporting
Accounts payable
Accounts receivable
Cash and bank management
Fixed assets

40. Dual Currency – Accounts payable and Accounts receivable
The Accounts payable and Accounts receivable modules already tracked reporting currency amounts. However, the amounts weren't shown or used for various processes. The following changes were made:
Reporting currency amounts are now shown on transactions for both customers and vendors. Reporting currency amounts are also shown for the open balance of each transaction.
The aging process has been updated so that an organization can view the aging buckets in either the accounting currency or the reporting currency.
Various inquiries and reports were updated so that they show reporting currency amounts. Examples include the Customer to ledger reconciliation and Vendor to ledger reconciliation reports.
The process for foreign currency revaluation already revalued amounts in the reporting currency. However, the reporting currency amount is now calculated through the transaction currency amount, as described in the Posting process section.
Upgrade consideration: Before an upgrade, the reporting currency amounts for documents (invoices, payments, and so on) are calculated through the accounting currency. For example, an invoice is posted before an organization upgrades, and the invoice isn't paid. During the upgrade, the invoice's accounting entry isn't changed. However, after the upgrade, the changes for dual currency are in effect. Therefore, when a payment is made for the invoice, the payment's reporting currency amount is now calculated through the transaction currency amount. When the payment and invoice are settled, a slight difference might be calculated in the realized gain/loss amount, because reporting currency amounts are now calculated differently. If the difference that is calculated is considered significant, the new Reporting currency adjustment journal can be used to adjust the balance of the realized gain/loss and Accounts payable/Accounts receivable ledger accounts in the reporting currency only.

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43. RSM US LLP +1 800 274 3978 www.rsmus.com
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